Monday, August 23, 2010

Transferable Skills & Your Money

School is not just about learning facts and memorizing vocabulary. It is about developing knowledge and skills necessary to be successful in various areas of your life. The most obvious place to use these skills is in your work, but these transferable skills can also apply to managing your finances. I believe that the same skills that you use to impress an employer in a job interview can also bring you closer to financial freedom:

You’re a “go-getter.” You volunteer to spearhead the new project at work before the boss even asks. When your sorority brainstorms ideas for a fundraiser, you take the liberty of drafting the proposal. This type of proactive behavior can easily help you in managing your finances. You’re already cut back on your shopping, but be on the lookout for other ways to save money. Find new ways to make money. The same way you send out prospecting letters to companies asking if they are hiring, send a message to the people in your network letting them know that you are able to plan events/sew/build websites/review resumes etc. for $XX dollars. Showing initiative will give you a chance to not only improve your financial situation, but also to develop your skill set!

I’m not talking about begging for money! I mean communicating with your credit card company to dispute a charge, or calling one of the credit bureaus to dispute errors on your credit report. I mean negotiating with your credit card company to get a lower interest rate because you’ve been a good customer for years and never missed a payment. Or asking for help when you need it (again, not talking about begging lol). Let’s say you have trouble making your student loan payments; there are a number of options for you to lower your payment or even suspend your payment for a period of time. You have to be able to reach out to sources that can help you, and clearly convey your situation to them.

I’m sure you already know how organization skills apply to your finances. At some point, everyone has been told to or has tried to create a budget. I’m not saying you have to create a super detailed spreadsheet outlining every single purchase you make…but you should have some method of keeping track of your spending that works for you. How can you save money if you don’t know how much you are spending? It is also important to keep track of when you your bills are due and setting a plan or schedule to remember to pay them. Missing payments not only hurts your credit score, but also can lead to late fees and higher interest rates.

Attention to Detail
It is important to monitor your bank accounts regularly to make sure you are not being overcharged or that you are not victim of identity theft. Identity thieves are smart; they may start out making small purchases here and there before taking a chance at buying the big screen TV with your credit or debit card. It is your job to take notice of these things early…nothing hurts more than getting your monthly statement in the mail and seeing a balance of $0.00 in your bank account.

Problem Solving Ability Problem: You owe $8k on a credit card with a 20% interest rate, and you want to pay it off in the next 3 years. You earn $35k a year after taxes, but 65% of that goes towards your other bills. Is your goal of paying your credit card off in 3 years possible, and how much will you have to pay on it each month in order to meet your goal? This is just from the top of my head, but the skills you learned in school or use in balancing the company budget can be put to work in your personal life.

Things happen. Jobs are lost, cars break down, cable rates go up…life does not happen according to your budget, so sometimes you may have to shift your financial priorities or even sacrifice some luxuries to accommodate a change in your income. Having the ability to respond to changes is critical for achieving your long term financial goals (because I guarantee you, your life will change tremendously in the next 10, 15, or 25yrs!) and prevent you from having a “Screw It!” moment and returning back to your bad habits.

Personal finance is not about using a one-size-fit-all approach to managing your money. It’s about using your strengths to achieve the financial goals you most desire. Try to use the skills that make you successful in school, work, or in your community to make you successful in managing your money.

1 comment:

  1. I look forward to viewing your page so I can stay up on my financials : )


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